unit 1-1.2 the entrepreneurial process. in the early years of the u.s economy, small businesses...
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Entrepreneurship
Unit 1-1.2 The Entrepreneurial Process
In the early years of the U.S economy, small
businesses were the norm. The Industrial Revolution brought about the
growth of large companies. Ex. Steel, railroads, manufacturing
History of Entrepreneurship
1960’s
Large companies were common No international competition
Produced job security 1970’s
International Competition low labor costs
Technology Revolution Personal Computers
Volatile economic climate High interest rates
History of Entrepreneurship
1980’s
Known as the Decade of Entrepreneurship Large companies were suffering Smaller companies were able to adapt to
changes Outsourcing
New service jobs created to address needs
Government regulation 1990’s
No job security and fewer benefits Move towards a more service-based economy
Influenced by internet and network technologies.
History of Entrepreneurship
The Entrepreneurial Evolution
1960s
1990s
1970s 1980s
Large diversified companies
Volatile economic climate; beginning
of technology revolution
No job security; move to service-based
economy influenced by technology
More government regulation;
smaller companies emerge
5 Components
1. Entrepreneur2. Environment3. Opportunity4. Startup resources5. New venture organization
The Start-up Process
Driving force Recognizes opportunity Pulls together the resources Brings the entire process together with life
experience Calculated risk taker Passion
1. The Entrepreneur
Variables that affect the venture but are not
controlled by the entrepreneur. 4 categories affect a new venture’s ability to start
and grow:1. The nature of the environment, whether it’s uncertain,
fast-changing stable, or highly competitive. 2. The availability of resources, such as skilled labor,
start-up capital and sources of assistance. 3. Ways to realize value, such as favorable taxes, good
markets and supportive governmental policies.4. Incentives to create new businesses. Such as tax
benefits and local, state and federal grants.
2. The Environment
An opportunity is an idea that has commercial
value only when customers are willing and able to buy it.
New businesses are founded on recognized opportunities in the environment.
3. The Opportunity
Being able to pull together the necessary
people and capital. Examples
Capital, Skilled labor Management expertise Legal and financial advice Facility Equipment Customers
4. Start-up Resources
The execution of the new business concept New venture organization is the infrastructure
of the business. The foundation that supports all of the
products, processes and services of the business.
5. The New Venture Organization
Business failure is a business that has stopped
operating with a loss to creditors A discontinuance is a business that is
operating under a new name or the owner closed it and opened a new one. Not considered a failure.
About half of all new establishments survive 5 years or more, and about 1/3 survive 10 years or more.
Success and Failure
In 2011 there were 28.2 million small
businesses.
Small businesses make up: 99.7%of U.S. employer firms 63% of net new private-sector jobs 48.5% of private-sector employment 37% of high-tech employment 98% of firms exporting goods
Understanding the Numbers